Many commercial powder metals are available for fabrication of metal parts by compacting, sintering, and heat treating. One of the more frequently used and readily available metal powders is manufactured and marketed by Hoeganaes Corp. under the trade name Ancorsteel 4600V. Although this metal powder when used in the fabrication of parts has shown good results, it has certain shortcomings which would be advantageous to eliminate. The specific composition of Ancorsteel 4600V is 1.8 Ni, 0.25 Mn, 0.5 Mo and the balance being Fe. This composition with appropriate amounts of carbon and zinc stearate will hereinafter be referred to as the known composition. It has been found that using this composition results in too much shrinkage during the sintering stage and the parts are generally difficult to machine. Obviously, it would be advantageous if these shortcomings could be eliminated without sacrificing the generally high strength and ductility possessed in parts made from such a metal powder composition.